Perspective, Pontification and Propoganda about Entrepreneurship and Venture Capital, brought to you by David Hornik of August Capital.

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shel israel

Excellent piece, Dave. As you may know, I leave in a short while for a world tour in research for my next book, Global Neighborhoods. Do you know of any entrepreneurs in Europe we could meet up with to discuss the impact of web 2.0 and social media on business and the world over the next few years? You can reach me via email at shel@itseemstome.net .

Harm

Also the region of Eindhoven is a good place for innovation and start-ups; perhaps better than Amsterdam.
Look at the Brainport programme that aims to in part accomplish a better climate for innovation. One the successes in this region is the High Tech Campus set up by Philips around the Open Innovation concept.

Links: www.brainport.nl and www.hightechcampus.nl

mlocker

Good info.

Michael Locker MD

Roupen  Nahabedian

The other part that I have found Europe doesn't get when it comes to startups is upside and options. Maybe this is caused by tax laws. But my experience has been that people generally don't understand options; workers don't ask for it; and the bosses don't offer it. It takes the fun out of being an entreprenour.

Silicon Valley is truly a very unique place.

Matthias Zeller

Good to hear you enjoyed your trip to the old world. I posted some more thought on this topic here: http://matthiaszeller.com/blog/2006/08/01/2nd-web-montag-in-silicon-valley-unite-german-and-american-techies/
If you are interested in discussion this topic with German entrepreneurs I suggest you participate in Web Montag (http://www.webmontag.de/doku.php?id=silicon_valley&DokuWiki=66ec443b59f703025c2831d5a94123eb).

David Mantripp

Amazing we can walk & chew gum at the same time here in Europe, really...

It would be interesting to discover if the higher barrier to entry results in a lower proportion of early failures. Having been involved in 2 myself so far, I hope it does :-)

FredDestin

What a post! Whilst we are nowhere near being as efficient as the valley (which has been going for 40 years now), there are sweeping generalisations and exagerations that do much to maintain a common misconception about European innovation markets, that have matured so much since the bubble. I think Dave ventured too far from the Valley ;-) and posted a fuller answer at http://fredd.typepad.com/blog/2006/08/dave_hornik_too.html

Shantanu

Some good points Dave. But I think you are being a little unfair. Here's why http://global-themes.com/entrepreneurship-in-europe/

Jeremy Fain

Mmm, I would tend to agree with you article: I m currently in Barcelona, Spain, and to my knowledge, there is no entrepreneurial ecosystem. One other thing that s true is the lack of angel financing in Europe.

However, there are exceptions to the rule: Paris for instance has a fantastic entrepreneurial ecosystem. I m describing it in this very post on my blog:
http://itaddict.blogspot.com/2006/07/innovation-clusters-south-west-paris.html#links

Didier

A lot is happening in Europe nowadays. To start with the ecosystem issue there are several ones emerging all over Europe. It is not that you just find them in Europe's major cities like Amsterdam and Paris and that is why they're sometimes harder to find. Todays emerging innovative regions can be found in the regions around Leuven (BE), Cambridge (UK), Heidelberg (DE), Nice (FR) or Tampere (FIN).

more on http://trendidier.wordpress.com/

Jeremy Silver

David, makes some very acute observations. There is one major and obvious factor that has not been mentioned in this discussion. Europe is not a single market the way that the US is. As a startup one's greatest challenge is to scale dramatically and rapidly to a point where the user base (and ideally the revenues;)) represent a value disproportionate to the initial investment and indicative of the ultimate scale the business could achieve. In the US market it is feasible from a small base to achieve this kind of scale. In Europe, currency differences and language differences instantly and significantly mitigate against this. So the comment which was made here that Euro start ups tend more towards b2b solutions and to working in verticals is correct and understandably pragmatic. The big consumer play that gets a VC's blood running is much less easy to comtemplate in Europe. That's why English language sites that address themselves to the US market are the few that manage the trick (eg LastFM). One interesting question however might be to explore what opportunities there are which make an asset out of the fragmented Euro scene. For example, there's much less Euro arbitrage going on than we all predicted would be the case six years ago...

massimo moruzzi

Paris has a scene, and its fair share of grumpy cheap places to live in and rent out for office space, and so does Berlin, which is still far cheaper - not to mention more hip - than any 'western' German city. The Swedish university town of Uppsala, just north of Stockholm and formerly home to pharmaceutical giant Pharmacia, is also an interesting case of private and public money (Scandinavians do it better) helping estabilish many new small pharmaceutical hi-tech companies after Pharmacia was acquired by Pfizer.

Then there's what was once referred to as 'eastern' Europe - one of the few positive legacies of the Soviet system being that they were strong on the sciences. Skype was technically based in Tallinn, Estonia, and its sale to the tune of up to 4.1 billion USD to eBay is equal to half that small country's GPD in 2003! Given the amount of technical talent, I'm really surprised that in the age of web2.0 (and AdSense!) we still haven't seen a slew of small companies springing out of the former Soviet bloc. But then again, as you state, an entrepreneurial climate does matter.

network23

Investors should examine the N3P school in Sweden

http://n3p.se/en.php

They generate a lot of new entrepreneurs in Open Source, Omni Communication and Web 2.0.

Jon

Part of the problem with Europe, I think, is that angel (and venture) capitalists don't find a niche like they do in the U.S. I read one comment about Spain, and while it's probably true that there are no angel capitalists there, it must also be true that they would not find any worthwhile investments on that turf, and are therefore floating around the U.S. (most likely) where worthwhile investments actually exist. Lets fact it, if 5-10% of a venture capitalist's projects succeed, that is an overall success. Well, this percentage is EXTREMELY difficult to attain even in the U.S. where there is basically no limit to one's possibilities. Imagine how much more difficult it would be to do so in a country like Spain. France is a different story because it is the face of industries like fashion, wine, home decor, and so much more... In general, I strongly believe that venture capital is not for everyone to begin with. In fact, I believe it was through www.lammazing.com that I found a whole article, "Is Venture Capital for You?" If you really want to know, go to Lammazing, and click on Business Services. There should be a section there on Venture Capital.

Jon

Part of the problem with Europe, I think, is that angel (and venture) capitalists don't find a niche like they do in the U.S. I read one comment about Spain, and while it's probably true that there are no angel capitalists there, it must also be true that they would not find any worthwhile investments on that turf, and are therefore floating around the U.S. (most likely) where worthwhile investments actually exist. Lets fact it, if 5-10% of a venture capitalist's projects succeed, that is an overall success. Well, this percentage is EXTREMELY difficult to attain even in the U.S. where there is basically no limit to one's possibilities. Imagine how much more difficult it would be to do so in a country like Spain. France is a different story because it is the face of industries like fashion, wine, home decor, and so much more... In general, I strongly believe that venture capital is not for everyone to begin with. In fact, I believe it was through www.lammazing.com that I found a whole article, "Is Venture Capital for You?" If you really want to know, go to Lammazing, and click on Business Services. There should be a section there on Venture Capital.

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